• Hedgeye Investing Summit: A Special HedgeyeTV Webcast Event

    The sharpest minds in investing discuss the most important market and economic developments and their investing implications. Join Hedgeye CEO Keith McCullough and our special guests live from October 14-16.

Takeaway: Following the Fed's December rate hike, Long Bonds (our favorite macro call) rallied to up 12% year-to-date versus 2.6% for the S&P 500.

Remember The Fed's December Rate Hike? What Happened Again? - Hawk dove cartoon 06.06.2016

As the Fed flounders from rate hike rhetoric to cautious soothsaying, Treasuries have rallied. Take a look at the flattening of the yield curve since the Fed decided to "raise interest rates" in December 2015. The yellow line is the yield curve on 12/15/15 and today's is the green line.

Rate hike ... What rate hike?

Click image to enlarge.

Remember The Fed's December Rate Hike? What Happened Again? - rate hike yield spread

To be clear, long the Long Bond (TLT) has been our most vocal Macro call. 

Heading into this year, it was a massively contrarian and in direct opposition to Wall Street consensus, which remained convinced the 10yr Treasury yield would hit 2.5% to 3% on Fed rate hikes. 

Guess what? Our Long Bond call...

IT'S WORKING

The flattening of the yield curve has paid off massively for investors in TLT. Below are the year-to-date returns on Long Bonds versus the S&P 500.

Remember The Fed's December Rate Hike? What Happened Again? - long bonds vs s p